I have two kids and want to invest Rs 50,000 in mutual fund for the long term. Please suggest the best fund toinvest in?- Manivannan Shunmugam
It is encouraging to see you take parental responsibility by investing for your child’s secure future. However, lump-sum investing is not the best way to invest in mutual funds. You should look at investing regularly through systematic investment plans. Moreover, before you start, you must set a financial goal such as building a corpus of 15 lakh for your child is about to enter college. This approach will help attain the desired clarity on the investment objective. Next, select a fund that will work in sync with your investment objective and is highly rated. Look for a fund that is consistent with a proven past-performance track record. Also analyse the fund’s performance over the long run in both bull and bear markets. For instance, if your investment horizon is over five years you can safely consider investments in a mix of large cap and large- and mid-cap funds.
This article was originally published on July 20, 2011.
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